Railways’ goods sheds may become privately-managed freight terminals

Goods sheds of Indian Railways (IR), many of which are in a dilapidated and abandoned condition, may soon become revenue churners for the transporter, as it plans to hand them over to private investors to build freight terminals.

Railways has already appointed a committee of five officers to work on a policy in this regard and the committee is expected to submit its report in three weeks.

According to a railway official, “The railways has around 1,000 goods sheds which require incremental investments. There is a good number of sheds which are in poor state and goods movement is slow. We are thinking to make them operate like private freight terminals (PFTs) which are running very efficiently.”

The committee is meeting potential investors such as Container Corp of India, PFT holders and private container operators, among others, to take their views and exchange ideas.

The policy is expected to boost IR’s non-fare revenue (NFR), which after the initial burst, has slowed down. During 2017-18, the NFR segment contributed around Rs 8,600 crore, compared with the target of Rs 14,000 crore. In 2016-17, NFR earnings which gets contributions from 15 segments stood at Rs 10,338 crore.

The difference between a PFT and a goods shed terminal under private management will be that railways will retain ownership of the land and shed, but money will come from private players who will also manage terminals. “It will be sort of a PPP (private-public-partnership),” said the official. PFTs are built on private land and rail connectivity to terminals is provided by railways.

However, as reported by FE earlier, IR is also working on a plan to allow PFTs on railway land adjacent to stations with a view to utilise vacant land parcels better, increase PPP investments and boost freight revenue.

Most of the goods sheds of railways lack facilities to ensure quick loading and unloading from rakes, leading to delays due to traffic, which, in turn, veer customers towards road transportation.

Railways expects to see incremental traffic at goods shed terminals and will be looking at providing investors with incentives on incremental traffic. “If investors are coming with money, they would like to see returns. For railways, we want that railway traffic to these terminals are generated. Investors should make terminals attractive and efficient enough so that people start booking rakes to these terminals,” said the official.